Reforming the 'iniquitous' bedroom tax

The Welfare Reform Committee at Holyrood has published an interim report on the bedroom tax, which it condemns as ‘iniquitous’ and a breach of human rights. (For the avoidance of doubt, I was not involved in this report – my role as adviser to the Committee, which has now finished, was confined to the Draft Budget, where they considered the Scottish Welfare Fund and the Council Tax Reduction.) The strength of the condemnation reflects a level of cross-party consensus in Scotland. It’s been condemned by organisations like the Scottish Federation of Housing Associations, who I work with, and Shelter. The bedroom tax has saved very little money, and getting rid of it shouldn’t in principle cost very much. Both the Scottish Government and the Labour opposition have been looking for a way to remove the policy.

The central problem here is that the Scotland Act 1998 reserves social security benefits in general, and help with housing costs in particular, to Westminster. Scottish authorities are only permitted to administer the finance and delivery of Housing Benefit. The strategy of the Scottish Government has been to press Westminster for an increased budget for discretionary payments and effective delegation. The Labour party is currently proposing that the Scottish Government uses a different power, to subsidise the provision of housing through organisations, and to write off debts attributable to the bedroom tax. The policies are moved by the best intentions, but there are problems with both mechanisms – both are difficult to administer and open to inequities. The process of writing off debts threatens a degree of insecurity for tenants and social landlords alike.

I was invited onto Newsnight Scotland yesterday to explain the basic issues – it should be on Iplayer for the next few days. I’d previously had a longer discussion with a BBC journalist and had expected the bit I’ve just explained here to be in a prologue, so we didn’t get on to the next bit at all. Housing Benefit was designed to do three things at once, and it doesn’t do any of them particularly well: income maintenance, the finance of social housing provision, and the creation of a market in rented housing. The benefit is difficult to understand and difficult to administer, and it produces some perverse outcomes. Despite all that, it’s been made to work, more or less; and tenants, social landlords and benefits administrators are all deeply apprehensive about changes. There’s every likelihood, then, that whatever happens now, Housing Benefit is going to be locked into something like its current shape. If you were setting to sea in a boat, you wouldn’t want it to leak and list like this one does; but once you’re far out in the water, it’s hard to think of a better alternative.